How to start an eCommerce business: a step-by-step guide
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Originally Posted On: https://xigen.co.uk/insights/how-to-start-an-ecommerce-business-a-step-by-step-guide/
Have you ever woken up in the middle of the night with an amazing business idea you want to share with everyone? If the answer is yes, you’re in good company!
In fact, nearly 60% of British people say they’d be happier if they were running their own business.
Setting up an eCommerce business is a fantastic way to enter the world of self-employment. You don’t have to spend money on a brick-and-mortar store, you can sell to a wide range of people, and you can quickly scale up as your business grows.
If you’ve been thinking of starting your own eCommerce business but aren’t sure where to begin, we’ve put this guide together to help.
Article topics
- Identify what you want to sell
- Carry out market research
- Source your products
- Create a business plan
- Identify how you’ll sell
- List the products you want to sell
- Test your store
- Launch your online store
- Optimise your business
1. Identify what you want to sell
The first step when it comes to starting an eCommerce business is to get a better idea of what you want to sell online. Ask yourself the following questions:
- Are you selling to other businesses or to consumers?
- Are you selling one-time products or subscriptions?
- Are you selling physical or digital products?
- Is your product seasonal (for example, summer clothing or Christmas decorations)?
- Will you be selling locally, nationally, or internationally?
- Do you have experience in the industry you are selling in, or is the sector new to you?
- Will you need any licences, permits, or qualifications to sell?
Once you know what you want to sell, you’ll be ready to do some more thorough research.
2. Carry out market research
It’s essential to check that your business idea is a viable one. You may think you have a brilliant business idea, but if nobody is interested, you won’t make those all-important sales.
According to CB Insights, 35% of failed startups do so because there is no market need.
Market research lets you see who your key customers are and what might drive them to buy from you. It includes:
- Who your target audience is
- Who your competitors are
- What the state of the current market is like, both now and in the future. A SWOT analysis is helpful for identifying internal and external opportunities and issues
One of the best ways to carry out market research is to speak to your target audience, either face-to-face, over the phone, or online. This will give you valuable, first-hand data you can use.
3. Source your products
You know which products you’ll sell to customers, but how will you locate and dispatch them?
It might be that you’ll be making the products yourself. Alternatively, you may ask a manufacturer to make the products on your behalf. You may buy from a wholesaler or retailer and sell at a markup.
Dropshipping is a popular option with smaller businesses. This is when customers place an order on your website, which is fulfilled directly by the wholesaler.
The main advantage of dropshipping is that you don’t have to carry stock or ship items. However, you need to ensure that the wholesalers you work with provide exceptional levels of customer service; otherwise it could reflect poorly on your business.
4. Create a business plan
You know what you want to sell, have done your market research, and are confident that your business idea will stand the test of time. Now it’s time to write a business plan.
A business plan will help you identify goals for your eCommerce business, spot any potential issues, and steer your strategy over the next few years. It’s also useful if you need a bank loan, or want to apply for funding or investment.
Business plans can vary in length and detail – from a 50-page document to a piece of A4! Typically they include the following information:
- A summary of what your business does and the products you will sell
- The structure of your business (e.g. will you be a sole trader or a limited company?)
- Who your target audience is
- How you will market your business
- How you will finance your business
- Who will run the business
- Your plans for the future
Remember that your business plan isn’t set in stone. It’s always good to revisit and update it if your circumstances change.
5. Identify how you’ll sell
Many people think you need a website to sell online, but this isn’t necessarily the case. You can also sell marketplaces like Amazon, eBay, Etsy… even social media platforms like Facebook, TikTok and Instagram.
The advantages of your own website
The main benefit of having your own eCommerce website is that you have complete control over what you sell and how you sell. Plus, as you don’t have to pay a commission like on third-party marketplaces, you can potentially receive more revenue.
There are also a wide range of different eCommerce platforms available for all needs and budgets. For example, if you want an easy-to-use website dedicated to eCommerce, Shopify is a great option. On the other hand, if you want a low-cost eCommerce plugin that works with WordPress, WooCommerce is a fantastic choice.
Another advantage is that you can establish direct relationships with customers. By nurturing customers, engaging with them, and using the data they provide, you can offer a high-quality customer experience, and encourage shoppers to come back time and again.
The advantages of using an existing marketplace
Marketplaces are great if you’re starting out or have a small budget. Third-party marketplaces like Amazon have a massive customer base and invest heavily in marketing, meaning you can reach a broad audience in a short amount of time.
Many marketplaces also offer logistics and fulfilment services for an additional fee, freeing up your time and meaning you can focus on growing your eCommerce business.
We always recommend building your own website; however a marketplace is an excellent way to test the waters and see if your product will sell online.
And, of course, if you want to maximise sales, you can use both platforms.
6. List the products you want to sell
It’s important to make your products sound as enticing as possible, especially if you’re selling the same items as your competitors are.
Whether you’re selling on your website or through a marketplace, you need a compelling product description and high-quality images that convince customers to click ‘add to cart’.
It’s also vital to answer prospective customers’ questions about your products. Not only does this encourage sales, but it can also help boost your product pages in the search engines too.
Social proof is critical, and encouraging customer reviews will give shoppers the impetus they need to make a purchase. Product pages with reviews are 3.5 times more likely to drive conversions than pages that don’t.
All eCommerce platforms and marketplaces will provide you with the functionality you need to compile, display, and respond to reviews.
7. Test your store
If your eCommerce store is slow, hard to navigate, or has a convoluted checkout process, it’s highly likely to reduce the number of sales you receive.
17% of people will walk away from a company after just one bad experience, so it’s vital to get things right first time.
Testing your eCommerce store thoroughly before you launch means you can identify and fix issues before your customers spot them.
Consider the following when testing your store:
- How it looks and loads on desktop and mobile
- How easy it is to create an online account
- How well it integrates with third-party solutions and plugins
- How easy the store is to navigate
- How simple and secure the checkout process is (it’s worth making a test purchase to ensure your payment provider functions correctly)
- How accessible it is (for example, thorough and relevant alt text for the images on your site)
It’s always worth getting multiple people to carry out testing, as one person may spot something that other people don’t.
Don’t forget to test on a variety of desktop web browsers and screen sizes. A website may look completely different on two different devices.
8. Launch your online store
The big day has arrived… it’s time to open for business!
It can feel a little scary launching your eCommerce store. However, as long as you’ve planned ahead and carried out thorough testing, you’ll be in a solid position to offer a fantastic customer experience.
Make sure you and your team are on standby during your launch period, so you can quickly make amends to your store if needed.
9. Optimise your business
Your online store has successfully launched, and the orders are starting to come in. However, it’s essential to continually review and optimise your store to ensure you get the most orders and to keep customers happy.
Some of the ways you can do this include:
- Identifying which marketing channels provide you with the best return on investment
- Reviewing where your website ranks in the search engines for specific keywords
- Tweaking low-performing product pages to improve conversion rates
- Streamlining the checkout and order fulfilment process
- Looking at page speed and how you can make your site load faster
- Providing additional functionality, for example, a chatbot or email marketing
Develop an eCommerce store to be proud of with Xigen
Getting started in eCommerce is challenging, but extremely rewarding. It’s a fantastic way to be your own boss and make money selling something you’re passionate about.
If you’re short on time or need someone with eCommerce expertise to get you started, Xigen is here to help. We specialise in developing, building, and marketing eCommerce stores across various sectors, from homewares to housebuilders.
We’ll work with you to understand your goals and what you want to achieve, choose the right eCommerce platform for your needs, and get you started on your eCommerce journey.
Contact our team today, and take the first step towards the eCommerce business you’ve always dreamed of.
